Texas taxes question (Child Care)?

This could get a little more complicated than you might want it too, but here is something straight from the IRS.

I am thinking of having a family member baby-sit for my child full time in their own home while I work. Are either of us responsible for taxes on the money I would pay? Can I claim this money as a child care expense even though my family member is not a registered day care provider?

You may have qualified child care expenses if the family member baby-sitting is not your dependent or your child under age 19 and you meet all the tests to claim the Child and Dependent Care Credit. Who is responsible for taxes depends on whether your family member is your employee or is self-employed. See Publication 15-A (PDF) , Employer's Supplemental Tax Guide, for a discussion of how to tell whether someone who is performing services for you is an employee or an independent contractor. If your family member is not your employee, then the family member will be responsible for paying income taxes and self-employment taxes on the money earned. If your family member is your employee, then you are generally responsible for withholding and paying the taxes. However, special rules apply to family employees. See Publication 15 , Circular E, Employer's Tax Guide, for these rules.

References:

Form 2441 (PDF), Child and Dependent Care Expenses

Form 2441 Instructions, Child and Dependent Car Expenses

Publication 15, Circular E, Employer's Tax Guide

Publication 15-A (PDF) , Employer's Supplemental Tax Guide

you want to parent the tax credit and flex deduction and word which one leads to extra tax money kept. probably the flex will be more beneficial as you're in a larger marginal bracket than the speed for the credit. considering money positioned right into a flex is lost on the right of the three hundred and sixty 5 days you need to somewhat underfund it and take the credit for some thing else. Which ever selection you make certain you need to record kind 2441 with your go back.

By "taxes," do you mean employer taxes? Like unemployment, soc sec etc? If so, usually the state will follow along w/ the fed. I suggest you go to Texas' state web site and find out there.